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The Amazing Flying Elephant
By David Glenn cox
Do you believe in magic numbers? There is a number that just keeps turning up like magic, the number is 1929. Nancy Pelosi wants to know what led to the bankruptcy of Lehman Brothers Holdings Inc. and the collapse of Bear Stearns Cos. and Merrill Lynch & Co. She favors an investigation modeled after the Pecora review of 1933 used to investigate the collapse of “1929.” But it will never happen; instead we’ll get a watered down pasteurized 9-11 style report that kind of blames everyone but holds no one accountable
Treasury bills are moving towards a yield of 0%, the first time since “1929.” In 1929 the purpose was to protect principle from loss this time treasury officials assure us it is proof of economic improvement.
“April 20 (Bloomberg) -- The last time U.S. Treasury bill rates headed toward zero percent investors were panicking. Now it’s an indication Federal Reserve Chairman Ben Bernacke’s efforts to revive credit markets are starting to work.”
Demand is on the rise and investors are snapping them up for two reasons, the first reason is that there is nothing safe to bet on in the US economy right now and secondly the future looks infinitely worse.
The treasury and the government’s assertion that banks and industries are too big to fail forget that unless the public is rescued as well then recovery is impossible. You cannot rescue a three-legged stool that does not have a seat. No matter how you fortify the legs they must be connected to the public as a whole.
It is estimated that as many as 5,000 GM and Chrysler car dealerships will close their doors. Cadillac might be expected to drop to as low as 150 dealerships nation wide. These closings mean another quarter million workers unemployed. Workers working to find new employment in a collapsing field already overcrowded with unemployed. How much more in bailouts and government funds will be necessary to rescue the corporations while the workers are abandoned?
(Bloomberg) “Foreign investors including central banks own $3.16 trillion, or 50 percent, of the $6.27 trillion in marketable Treasuries outstanding, according to Treasury data. The U.S. needs to raise $3.25 trillion this fiscal year, as the government finances bank bailouts, stimulates the economy and services deficits, according to Goldman Sachs Group Inc.”
And who owns the lions share of those notes? ‘Symbiotic Relationship’ “China and the U.S. have a symbiotic relationship,” said Win Thin a senior currency strategist in New York at Brown Brothers Harriman & Co. “We need each other.”
“Treasury Secretary Timothy Geithner refrained from labeling China as a currency manipulator last week, backtracking from an assertion he made during his confirmation hearings in January. In its first semiannual report on foreign-exchange policies since Geithner became secretary, the Treasury said April 16 that while China’s yuan remains “undervalued,” no country “met the standards” for illegal currency manipulation during the period of the report, from July 2008 through December 2008.”
The United Steel workers have asked Barack Obama and filed a petition with the US International trade commission asking to cut the imports of automobile tires from China by 50%. China sent 46 million tires to the United States in 2008 while General Electric sold third generation Nuclear power plants and technologies to China.
“The Chinese import surge has been a significant factor that has led to the idling of factories,” Leo Gerard, president of the United Steelworkers, told reporters. The union represents about 15,000 tire workers at 13 plants across the United States. Want to take a bet on which way Obama will rule?
The stock market fell yesterday as reality reared its ugly head; the number of bad loans is on the rise. The treasury has backstopped the banks giving them literally free money to lend at what ever interest rate the market will bear. Only one problem Batman, who and where to lend it too. No one is safe, no investment is good leaving the future is bleak indeed when you borrow for free and worry more about bad loans than interest rates. The IMF has increased expected losses of US banks again from $1.4 trillion on October to $2.2 trillion in January to the new number $2.7 trillion this month. Any bets on the second quarter numbers? It was originally estimated that the subprime mortgage crisis as it was originally labeled would cost the US economy $600 billion dollars in total.
The governments direct injections have now exceeded $700 billion dollars. The bailouts, buyouts, swaps, loans amount to shoving fresh hay up a horses ass and they scratch their heads and wonder, “Why isn’t he putting on any weight?” They’ve tried every thing in their bag of tricks except feeding the end that eats.
So how does a Democratic government respond in a time of crisis for its people? By with distraction of course. Promises and pledges but nothing that you can sink your teeth into either figuratively or literally. The Republican’s have commenced their American Idiot; Tea baggers 08 tour and the Democratic media have taken the bait and missed the point. This is a first draft, a testing of the waters. The Liberty League revisited like the jackbooted thugs in Munich in “1929” they are comical enough if you forget their true intent. This is a mobilization of the right wing.
Before you laugh have you forgotten Florida in 2000? How a few hundred operatives changed an election? Rudy Gulianni and Newt Gingrich are going out on the road to defend traditional marriage in a series of town hall meetings the purpose is to portray the Democrats as trying to destroy traditional marriage. To subvert the true issue of millions losing their homes and jobs and a government that is unable or unwilling to do anything about it.
The headlines, again from Bloomberg,
“Democrats Surpass Republicans in U.S. Campaign Money During First Quarter”
“Obama, Bush Run Up Nation’s Public Trust Deficit:”
Watch the shiny keys! Only read the headlines, every thing is going to be all right.
If we can just give the banks and corporations more and stop Obama/Bush from raising your taxes and taking your guns away. The Chinese are our friends we have a ‘Symbiotic Relationship’ don’t you know. We trade technology for tires and T bills for undervalued cash to fund the tax cuts that got us in to this mess, but watch the keys!
“The most heroic word in all languages is revolution.”
(Eugene V. Debs)
To believe in this country is to believe in the Amazing Flying Elephant!
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